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Q: I have been working in an MNC for last 8 years and now want to start on my own. We have been a service family so I would like to understand, what should be a reasonable rate of return on investment in a franchise opportunity?
A: As a franchisee Business owner, you will be investing both your time and talent in the business in addition to the capital. Therefore it would be fair to expect both Returns on time and Return on Investment. On the other hand, the business cycle for a startup will typically first lose money during its gestation period, then break even and eventually become profitable. For an average business, this process takes about two to three years. As far as ROI is concerned, it should certainly be more than what bank interest or stock returns can offer you, so without being over optimistic, a fair number would be say anything above 12-13%.It will also depend on the type of Business you are investing in. As regards, return on time, one needs to see what remuneration the market would give for your talent. As a startup Business owner, you would need to give more hours than your job at least during the gestation phase so a 5% mark up is reasonable (applicable after gestation phase). If the franchisors ROI and your own calculations come up with any less than this return, it does not seem reasonable to take the risk. At Franchise India 2016, our Advisory team could give work with you to identify Business opportunities that could best suit your needs. To avail Free advice from our Business consultants, Register Today
Q: Is it ok to purchase an established franchise from an outgoing franchisee or to start at a new location from scratch?
A: Firstly, an arrangement like this comes with some obvious advantages. The business is already up and running. You don't have to go through the hassle of doing the groundwork & build it up. The staff is already in place and trained, and the business has an existing customer base and hopefully a great reputation in the community. Inventory is already in the store and all your vendor relationships are in place. You can also get the chance to review the books of records to determine real numbers in an operating location. On the other hand, you need to put strong agreements in place. You would be having a tri- party arrangement therefore Your agreement with franchisor needs as serious a review .See how long is the franchise agreement for, when it needs to be renewed, terms of renewal, you would also need training to run the business etc. Similarly at the seller’s end be sure to know the reasons why they are selling and be careful to start a dialogue with franchisor at the same time because usually he may have the first right for refusal in such cases. At Franchise India 2016, our Advisory team could give work with you to negotiate the right deal ,that could work to your advantage. To avail Free advice from our Legal consultants, Register Today
Q: Does a small business investment in a franchise means less returns?
A: We toy with various ideas about setting up shop to open a new business in the local community. The predicament however is the fear of failure or losing a lot of money, which often holds us from giving wings to our business dream. Creating businesses does not have to be an expensive process, not always. Today there countless Low investment business ideas which help you do businesses with outside the box concepts and low starting cost. These concepts are usually address a real, continuing market need or opportunity in a better manner.
At Franchise India 2016, you will get hundreds of Ideas for good businesses with little capital investment. Whether you’re looking for home business ideas, service business ideas, online business ideas or want a part-time business, Brainstorm with the small business ideas, find a concept and think about ways that you can fine-tune the business to exactly meet the needs of your local market. You could get the right brand matching your capital Investment needs across all sectors of Business. Meet franchise India Business consultant to share more Business Ideas with you, Register Today
Q: I want to set up a food franchise in a new mall. Should I approach franchisors first, or is it better to secure a site before approaching franchisors?
A: You need to finalize the deal with a franchisor first and then can you start looking for a suitable site in the food court. Many franchisors provide new franchisees with hands-on assistance in understanding or negotiating leases, they will have to approve the site. Well-established franchisors have experience, not only in different markets, but also in locations that vary in size, surroundings and customer draws. They should be able to provide you with accurate site criteria as well as the training and other assistance needed to find your site. This is in your interest because franchisors are experienced in these matters and know which sites are right for their brands. Also, they can further help you negotiate the right deal with the landlord and realize better terms for you.
At Franchise India 2016, you could get the right franchise brand & location solution to start your business right away. Avail Free advice from our Business consultant, Register Today
Q: I want to take a franchise. Is it wise to invest all my cash or should I rather take out a loan and keep a nest egg, just in case?
A: The important think while investing in a franchise is to ensure that your capital should cover cost of franchise fee plus investment for initializing business while still having enough working capital for your first initial months of working. Even though a franchise will typically reach break-even sooner than an independent business with no track record, it still takes time. Your franchisor will have given you projections, but you need to remember that these are assumptions only. With the best will in the world, nobody can guarantee that your business will perform exactly in line with projections.If your business is a cash business, for example a fast food outlet or education institute where most people pay cash for their purchases, cash flow should pick up fairly quickly. If so, you could invest part of your capital with your bank and use the investment as surety for an overdraft.
At Franchise India 2016, you can meet with several national & Private Banks, who are giving Franchise Business Loans. Pre-Register your meeting to present your business to Funding Bodies.
I want to expand my brand in other regions
Q: Our education company operates successfully since 2007 and we have evolved into one of the largest operator in the field in our region. We are now considering national expansion and want to know whether it is better to set up a network of branches or to franchise.
A: After six years in business, you are certainly ready to consider franchising as an option. The advantage of franchising is that franchisees invest their own money into the expansion of your brand and are therefore highly motivated to ensure the success of their businesses.
The biggest difference between franchising and owning a company store is running the day to day business. If you own your store, you need to oversee everything on a day to day basis and this could cost a lot of money and time especially when you want to expand your business around the country or even overseas, and sometimes you might not know the local business environment very well without market research. However Before you roll out a franchise, you need to establish beyond doubt whether the concept is franchiseable. If so, you need to set up the necessary infrastructure. It is especially important to ensure that franchising the business is financially viable for both parties after the costs of taking this step have been taken into account. You will need to formalize the marketing plans that a new franchisee will use to drive customers into their new unit. You will also need to design a sales system that you can use to recruit new franchisees into your franchise company. Franchisees are your partners and different from employees you have right now and you need to make sure you don't treat them as if they were employees.
Meet our Franchise consultant and get Free Advice on How to franchise your business at Franchise India 2016
Q: I am a fresh MBA graduate. Do you think I should start a franchised Business or my inexperience could be an obstacle in becoming a successful franchisee?
A: Your relative inexperience may not be as big a hurdle as you may imagine because the core of franchised businesses is that franchisor gives you brand name, training, systems and strategies and continuous support while you promise your dedication to Business operations at local level, time and money commitment. Your energy and enthusiasm to do businesses would certainly make up for your inexperience in many areas where your franchisor would shorten your learning curve. The bigger challenge you may face is however in acquiring a franchise because good franchise companies do not sell franchisees rather they select franchisees. It would be better though if you would have a franchise sophisticate by your side which could either be a franchise consultant or lawyer. And as relatively new entrant start,try to maximize your learning on franchising which could come through attending Franchise India 2016.